Archive for March, 2011

Are you savvy enough to avoid internet scams?

Thursday, March 31st, 2011

Attorneys are generally a pretty savvy bunch, or at least we would like to think so.  However, there are increasing numbers of attorneys who are being scammed on the Internet, by an increasingly sophisticated set of scam artists.  The FBI has issued press releases in a number of states warning about this specialized fraud.  In November of last year, six people were indicted in in the Middle District of Pennsylvania in a $32 million attorney Internet scam.  The victims included 80 lawyers in Pennsylvania, Massachusetts, Alabama and Georgia.  Lawyers in Texas, California, Montana, Utah and Idaho have all fallen prey to these scams.  Most of the scams involve e-mail solicitation for help in a divorce or collections matter.  The attorney receives a certified check for his services, but the check is greater than the retainer requested (there are a number of variations, but most include a check received from the “client”).  The attorneydeposits the check in his/her account and returns the excess portion to the “client.”  Only later does the attorney learn the check was fake.  Unfortunately for the attorney, the bank does not care that the check the attorney received was fake and will demand funds for the check sent to the “client.”

The FBI warns attorneys: “All Internet users need to be cautious when they receive unsolicited e-mails. Law firms are advised to conduct as much due diligence as possible before engaging in transactions with parties who are handling their business solely via e-mail, particularly those parties claiming to reside overseas.”  As always, malpractice avoidance is practiced by meeting your clients.  If you cannot meet your clients, be very wary of the cases you accept.

FBI warning can be found here: http://dallas.fbi.gov/pressrel/pressrel10/dl060210.htm

For information on the Middle District indictment see: http://www.abajournal.com/news/article/six_indicted_in_32m_internet_collection_scam_that_snagged_80_lawyers/

-Josh J.T. Byrne, Esquire

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Two way traffic ahead

Wednesday, March 30th, 2011

The Pennsylvania Supreme Court recently made the most significant ruling with respect to the attorney-client privilege in a number of years.  Strengthening the attorney-client privilege is important to those of us in the legal malpractice defense practice.  In Gillard v. AIG Insurance Co., No. 10 EAP 2010 (Pa. 2011), the Court ruled that the attorney-client privilege “operates in a two-way fashion to protect confidential client-to-attorney or attorney-to-client communications made for the purpose of obtaining or providing professional legal advice.”  The expansion of the privilege to protect not only information from the client to the attorney but also from the attorney to the client is a significant change, or at least clarification, in Pennsylvania law.  Prior to this decision, Pennsylvania case law, while far from settled, strongly supported the position that communication from the attorney to the client was not protected, unless it would reveal client confidences received from the client.  The opinion was written by Justice Saylor, with dissents by Justice Eakin and Justice McCaffery.  The opinion can be found at: http://scholar.google.com/scholar_case?case=12916170781192301515&hl=en&as_sdt=2&as_vis=1&oi=scholarr

-Josh J.T. Byrne, Esquire

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The age of innocence

Friday, March 25th, 2011

The New Jersey Superior Court, Appellate Division, has added a new wrinkle to its evolving case law on the importance of innocence in a legal malpractice case involving a criminal defendant.  In Marrero v. Feintuch, 418 N.J.Super. 48, 11 A.3d 891 (N.J. Super. App. 2011), Judge Marie E. Lihotz wrote that “a plaintiff need not prove actual innocence of criminal charges as a prerequisite to pursue legal malpractice claims against his former criminal defense counsel.”  However, the court held that the guilt or innocence may be relevant to the legal malpractice defense, and the ability of the plaintiff to prevail in the necessary “suit within a suit” analysis.  Although many courts (including Pennsylvania’s) have required a showing of actual innocence before a criminal defendant can maintain a malpractice action, New Jersey continues to eschew such a requirement.

The decision of the Appellate Division can be found at: http://scholar.google.com/scholar_case?case=3061756539907056555&hl=en&as_sdt=2&as_vis=1&oi=scholarr

-Josh J.T. Byrne, Esquire

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Don’t forget to file your post-trial motions!

Tuesday, March 22nd, 2011

The Pennsylvania Superior Court has just quashed an appeal of an $18,489,221.60 (and counting) verdict entered against Safeway, Inc., as the successor of Genuardi’s Family Markets, Inc. (Newman Development Group v. Genuardi’s, 744 EDA 2010 (Pa. Super. 2010).  The Superior Court quashed the appeal because defendants did not file any post-trial or reconsideration motions after the trial court’s final verdict following a remand from the Superior Court.  Although the defendants had filed a motion for reconsideration of a January 15, 2010 opinion, they did not file any motion with respect to a subsequent February 25, 2010 decision.   Plaintiff argued that the failure to file a post-trial motion with respect to the February 25, 2010 decision resulted in a waiver of the issues on appeal pursuant to Pa. R.A.P. 227.1, and the Superior Court agreed.  The Superior Court rejected defendants’ argument that no post-trial motion could be filed because there was no trial following the remand.  Malpractice avoidance requires you to keep those post trial motions in mind.  The full decision can be found at:

 http://www.pacourts.us/T/SuperiorCourt/SuperiorCourtOpinions.htm

-Josh J.T. Byrne, Esquire

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When is an Action Terminated for Purposes of the Dragonetti Act

Wednesday, March 16th, 2011

When is an Action Terminated For Purposes of the Dragonetti Act

            For lawyers in Pennsylvania, the Dragonetti Act (the codification of the common law tort of wrongful use of civil proceedings) holds a particular morbid fascination.  There is nothing quite like having an old case come back to haunt you because the person you brought an action against thinks he or she should not have been involved in litigation.  For defense attorneys it can also be a useful tool/weapon to try and end an action you believe has been brought without merit.  Whether you are threatened with it by another party, or you wish to use it as a tool, it is important to understand the elements of this cause of action.  This article addresses the first element of a wrongful use of civil proceedings claim.

            Wrongful use of civil proceedings is codified at 42 Pa.C.S.A. § 8351.  Section 8351 provides:

(a)       A person who takes part in the procurement, initiation or continuation of civil proceedings against another is subject to liability to the other for wrongful use of civil proceedings:

(1)       He acts in a grossly negligent manner or without probable cause and primarily for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claim in which the proceedings are based; and

(2)       the proceedings have terminated in favor of the person against whom they are brought.

42 Pa. C.S.A. § 8351(a).  Accordingly, a cause of action for wrongful use of civil proceedings requires a plaintiff to allege and prove three elements: (1) the underlying proceeding was terminated in favor of the plaintiff, (2) the defendant caused these proceedings to be instituted without probable cause or with gross negligence, and (3) the proceedings were instituted primarily for an improper purpose.

            At first glance, the first element, that the underlying action has terminated in plaintiff’s favor appears simple enough.  However, as with most such apparently simplistic statements of law, there are a number of wrinkles to examine.  Although Pennsylvania courts have only touched on the issue, courts in a number of other states have clearly stated that in order to be a “termination” for wrongful use of civil proceedings purposes, the end of the underlying case must at least reflect on the merits of the underlying case.

            The termination need not be on the merits, the prior proceeding need only be consistent with the plaintiff’’s claim of no liability on its part.  DiMassa v. U.S.F. & G., 8 Phila. 549, 552 (Phila. 1983) see also D’Elia v. Folino, 2007 PA Super 286, P12 (Pa. Super. Ct. 2007) (“it is clear that Appellant’s liability, or lack thereof, was never and can never be determined with finality. . . . [a]s such, Appellant was not the ‘victor’ in the underlying lawsuit, and he cannot, as a matter of law, prevail against Appellees in a wrongful use of civil proceedings suit.”).

            The requirement that the termination reflect upon the merits of the action arises out of Restatement (Second) of Torts§ 674 (comment j), which states: “In determining the effect of withdrawal the same considerations are decisive as when criminal charges are withdrawn; and therefore §§ 660-661 and 665, and the Comments under those Sections are pertinent to this Section.”  Restatement 2d of Torts, § 660, Comment a states: “Proceedings are ‘terminated in favor of the accused,’ as that phrase is used in § 653 and throughout this Topic, only when their final disposition is such as to indicate the innocence of the accused.”

            A termination based on a defense which is merely procedural or technical in nature, and is in no way dependent on nor reflective of the merits in the underlying action, cannot qualify as a favorable termination.  See, Alcorn v. Gordon, 762 S.W.2d 809, 812 (Ky. Ct. App. 1988); Wong v. Panis, 7 Haw. App. 414, 772 P.2d 695, 699 (Haw. Ct. App. 1989); Miskew v. Hess, 21 Kan. App. 2d 927, 910 P.2d 223, 233 (Kan. Ct. App. 1996); Palmer Dev. Corp. v. Gordon, 1999 ME 22, 723 A.2d 881, 884 (Me. 1999).

            The Supreme Judicial Court of Maine explained the rational for this rule as follows:

Society does not want litigants who committed the acts of which they are accused, but who were able to escape liability on a “technicality” or procedural device, to turn around and collect damages against their accuser.  This reason justifies a requirement that the favorable termination of the underlying proceeding be on the merits or, in some way, reflect on the merits.

 Palmer, supra at 885. 

            In sum, it is not essential to maintenance of an action for malicious prosecution that the prior proceeding was favorably terminated following trial on the merits; however, termination must reflect on the merits of the underlying action.  As noted above, the Pennsylvania courts have not yet fully embraced this concept, but appear to be receptive to it, and the precedent throughout the country is strongly supportive.

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